In the present paper is made an attempt to describe and analyze in terms of the various theories the process of creating new high-tech industries in China on example of titanium industry.Object and subject of study. The object of research is the titanium industry in China Subject of research — the impact of investment on the development of the industry (investment to import of equipment or FDI).The purpose of research — identifying the effects of government policy in the field of investment in high-tech industries on example of titanium sub-sector and analyze the advantages and disadvantages of alternative investment solutions.Methodological basis of the research, on the one hand, will perform theoretical models of economic growth, international trade and FDI (content analysis), on the other hand, cases containing scenes that took place on specific metallurgical industry in two Chinese provinces. For comparison it will also be considered case with the plot of one Japanese metallurgical enterprise. Also it will be provided a narrative interviews with professionals from titanium industry,Information base of research includes scientific publications on topics of investment, on the problems of the steel industry, materials industry surveys and conferences, the texts in-depth interviews with leaders of Russian enterprises in partnership with representatives of the Chinese steel industry.Titanium industry began its development in the mid 20th century, however, the active use of titanium in such innovative areas such as aviation, space, nuclear energy, prostheses, etc., and strong competition in the market of titanium mill products leads to constant technical complexity of production, and hence to innovative activity in this sector. Furthermore the process of melting is much more complicated, since titanium is a refractory metal and has a number of properties that may be lost at using the wrong technology and the wrong operation of the equipment. Which leads to the need for special engineering centers and technical training of human resources. Therefore, many countries are not able to take risks and start to develop this industry from scratch. In this paper author asked the question: Whether there will be a structural change in China's economy, which marked the transition to shumpeterian wave of new growth, based on the emergence of new technologies? According to the results of the case, interviews and analysis of statistical information author can say that China is definitely approaching a new milestone in the development, but there are a large number of obstacles to its development. The first should mention the factors that led to the crisis of overproduction of titanium in China, and China throughout the world, in the industrial sector. China, like other countries belonging to the so-called developmental state, characterized by a large impact of public policy on the economy. Moreover, China can be seen as a country which is dominated by state capitalism and planned economy, similar to the economies of the socialist countries. Investment decision-making mechanisms in the Chinese environment in the titanium industry were as follows. Chinese bureaucrats in 2000-x's make a decision about the development of titanium industry. Thereafter, various provinces, which can be described as a state in the state, begin to compete with each other to get permission and funding for projects (in this case melting production of titanium ingots). However, these solutions are often economically unreasonable, and in this paper we will show why this is so, and what that leads to.In this study is performed theoretical understanding of the origins of the current problems of the Chinese economy, which were the result of extensive investment policy, and figuring out how the analysis of cases and in-depth interviews with experts of metallurgical industry working closely with representatives of China's titanium industry, contributes to the validity of the theoretical assumptions and helps in finding solutions to problems formulated.

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